- The Australian dollar dominates the week against the greenback, reaffirming its neutral bias to the upside.
- The economic docket will feature Fed members making statements throughout the day as traders prepare for the US CPI.
- AUD/USD Technical Outlook: The pair has a neutral bias unless it retraces the 100-day DMA at 0.7248.
The AUD/USD gets gains for the third day in a row, so far up 1.5% on the week as market participants brace for Thursday’s US inflation figures. At the time of writing, the AUD/USD is trading at 0.7185.
Wednesday’s economic docket is light except for Fed Spokespersons Michelle Bowman and Loretta Mester, leaving AUD/USD traders drifting on market sentiment plays or positioning ahead of new data. financial. On Thursday, the US Consumer Price Index (CPI) for January is forecast at 7.3%. The so-called core CPI, excluding volatile items such as food and energy, is estimated at 5.9%, both readings on an annual basis.
During the week, John Edwards, a former member of the Reserve Bank of Australia (RBA), said that the RBA could raise rates four times in quick succession by the end of 2022. Last week, RBA Governor Philip Lowe, ” conceded” that tightening monetary policy was a “plausible scenario”. However, he emphasized, as was also noted in the Monetary Policy Statement and in the press conference, that they are prepared to be “patient”.
Earlier in the Asian session, the Australian economic docket reported the Westpac Consumer Confidence Index for February at 100.2, down from 102.2 reported in January. On Thursday, building permits for December are estimated to rise 8.2%.
AUD/USD Price Forecast: Technical Outlook
AUD/USD has a neutral bias, as shown by the daily moving averages (DMA). At press time, AUD/USD is trading above the 50 DMA which is at 0.7163 but appears to be far from the 100 DMA at 0.7248 which intersects a three-month downtrend line around that area.
However, a daily close above the 50-day DMA would expose 0.7200 as the next resistance level. Once that subsides, then and only then would AUD bulls challenge the 100 DMA. A break of the latter would expose the Jan 13 daily high 8 pips below 0.7300.
Additional technical levels
Source: Fx Street
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